The outlook outweighs short-term fluctuations, analysts collectively raise NVIDIA's target price

Despite Nvidia's earnings guidance failing to meet investor expectations, Wall Street analysts remain optimistic, raising the target price for the world's most valuable company.

Analysts are focusing on Nvidia's long-term prospects, particularly the increased production capacity of the Blackwell AI chips and the continued strong demand for orders. At least 10 institutions raised their 12-month target prices after Nvidia released its earnings report on Wednesday, with the average target price increased by 3% to $202.60. Several institutions, including JP Morgan and Truist Securities, emphasized that although the short-term guidance appears slightly weak, the company's long-term growth trajectory remains solid.

Currently, Wall Street holds an overwhelmingly bullish view on Nvidia, with 72 analysts giving a buy rating, only 7 analysts maintaining a hold rating, and just 1 giving a sell rating.

Nvidia provided a relatively modest revenue forecast for the current quarter, expecting third-quarter sales of approximately $54 billion. While this figure aligns with Wall Street's average expectations, some analysts had previously predicted sales would exceed $60 billion. The company's stock price fell about 1.9% in pre-market trading, narrowing the previous decline.

Institutions Significantly Raise Target Prices

Data shows that at least 10 institutions raised their 12-month target prices after Nvidia's earnings report, with the average target price increasing by 3% to $202.60, indicating about a 12% upside from Wednesday's closing price.

JP Morgan analyst Harlan Sur significantly raised the target price by 26% to $215 and reiterated an overweight rating on the stock. Sur pointed out that the increase in Blackwell AI chip production capacity is a key factor:

"We believe Nvidia's 12-month forward orders continue to exceed supply capacity."

Truist Securities analyst William Stein raised the target price by 9% to $228. Although he acknowledged that "sales performance and guidance were slightly below buyer expectations," he emphasized that "we view this as a minor blemish and focus on the management's resilient long-term outlook."

Short-term Guidance Raises Concerns

Nvidia's revenue forecast of $54 billion for the third quarter, while in line with Wall Street's average expectations, did not meet some analysts' optimistic predictions of over $60 billion. This relatively modest guidance has somewhat affected investor sentiment.

Morgan Stanley analyst Joseph Moore stated that while expectations entering the earnings season were high, "the most important indicators have been validated." Moore raised the target price from $206 to $210. Since the release of the first-quarter results in May, Nvidia's stock price has risen approximately 35%, with a market capitalization increase of over $1 trillion.

However, the outlook for the Chinese market remains a major uncertainty for Nvidia. Morgan Stanley's Moore stated:

"The Chinese market remains unpredictable, and the management seems to hold a cautious attitude towards the prospects of resolving related issues."